Exhibit 10.29
FIFTEENTH AMENDMENT TO
EMPLOYMENT AGREEMENT
This Fifteenth Amendment to
Employment Agreement (the “Fifteenth Amendment”) is
made and entered into by and between KENNEDY-WILSON, INC., a
Delaware corporation (the “Company”), and William J.
McMorrow, an individual (“Employee”). This
amendment will become effective at the times set forth below, which
include the time at which KW Merger Sub Corp. (“Merger
Sub”), a subsidiary of Prospect Acquisition Corp.
(“PAX”), is merged into the Company (the
“Effective Time”).
RECITALS
WHEREAS, Company and Employee have
entered into that certain “Employment Agreement” dated
as of August 14, 1992, as amended January 1, 1993,
January 1, 1994, March 31, 1995, January 1, 1996,
May 19, 1997, August 20, 1998, August 9, 1999,
January 3, 2000, October 1, 2000, April 22,
2002, October 1, 2003, April 21, 2004,
January 1, 2008, and February 1, 2009 (collectively, the
“Agreement”) providing for the employment of Employee
by Company pursuant to the terms of such Agreement; and
WHEREAS, Company and Employee have
agreed that the terms of the Employment Agreement shall be modified
as set forth below and that, except as modified, the Agreement
shall remain in full force and effect.
WHEREAS, Company and Employee have
agreed that the modifications set forth below that are effective as
of the Effective Time shall be conditioned upon the consummation of
the merger of PAX into the Company.
AMENDMENT TO
AGREEMENT
NOW, THEREFORE, for good and
valuable consideration the receipt and sufficiency of which are
hereby acknowledged, the parties hereby amend the Agreement,
effective as of the times set forth below.
1.
Section 2 (b) is deleted
immediately before the Effective Time.
2.
Section 9 is deleted as of the
Effective Time and a new Section 9 is substituted as of the
Effective Time, to read as follows:
9.
Termination
.
(a)
Either Company or Employee may terminate this Agreement at any time
during the Term, in the event of a material breach of this
Agreement by Employee or Company which is not corrected within
thirty (30) days after the written notice of the breach is
delivered to the other party. The written notice from Company
to Employee shall include a reasonably detailed description of
Employee’s acts or omissions, which constitute cause for
termination. The term “cause” shall mean:
(i) the breach of any material provision of this Agreement;
(ii) persistent misconduct, neglect or negligence in the
performance of Employee’s duties and obligations as set forth
in this Agreement; (iii) disloyal, dishonest or illegal
conduct or moral turpitude of
Employee; (iv) such material carelessness
or inefficiency in the performance of his duties that Employee, in
the reasonable discretion of Company, is deemed unfit to continue
in the service of Company; and (v) the material and persistent
failure of Employee to comply with the policies or directives of
Company and/or failure to take direction from Company
management.
(b) Employee’s
employment with Company shall cease upon the date of his death or
physical or mental disability to the extent that Employee becomes
disabled for more than sixty (60) consecutive days or ninety (90)
days in the aggregate in any 12-month period and unable to perform
his duties on a full-time basis. Upon termination for death
or physical or mental disability, Company shall continue to pay
Employee the basic salary described in Section 4 for the
remainder of the Term of the Agreement on the Company’s
ordinary payroll dates applicable to similarly situated employees
of the Company, together with such other employee benefits (other
than continued participation under the Company’s
Section 401(k) plan) as Employee may be entitled to under
the provisions of Section 6 (or if such benefits cannot be
provided pursuant to the terms of the applicable plans, comparable
benefits, provided, however, that the provision of comparable
benefits shall be made following Employee’s termination of
employment only if and to the extent that such benefits may be
provided at no additional cost above what was previously paid by
the Company).
(c)
If the Employee is terminated by Company prior to the end of the
Term without cause, then Company shall continue to pay Employee the
basic salary described in Section 4 for the remainder of the
Term of the Agreement on the Company’s ordinary payroll dates
applicable to similarly situated employees of the Company, together
with such other employee benefits (other than continued
participation under the Company’s
Section 401(k) plan) as Employee may be entitled to under
the provisions of Section 6 (or if such benefits cannot be
provided pursuant to the terms of the applicable plans, comparable
benefits, provided, however, that the provision of comparable
benefits shall be made following Employee’s termination of
employment only if and to the extent that such benefits may be
provided at no additional cost above what was previously paid by
the Company).
(d)
If Company instructs Employee to work full-time or substantially
full-time at any location not acceptable to Employee (other than
the Company’s main headquarters) that is more than 50 miles
from Employee’s then principal place of work and more than 50
miles from Employee’s then principal residence, or eliminates
or materially reduces his duties as CEO/Chairman, then Employee may
elect to deem such action(s) a constructive termination by
Company and resign his employment, provided that (i) such
resignation occurs within one year of such action(s);
(ii) Employee provides written notice to the Company of such
action(s) within 90 days thereof; and (iii) the Company
fails to cure the action(s) constituting such constructive
termination within 30 days of receipt of the notice.
In the event of such a resignation, Company shall continue to pay
or provide Employee for the remainder of the Term the basic salary
described in Section 4 of the Agreement on the Company’s
ordinary payroll dates applicable to similarly situated employees
of the Company, together with such other employee benefits (other
than continued participation under the
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Company’s Section 401(k) plan)
as Employee may be entitled to under the provisions of
Section 6 (or if such benefits cannot be provided pursuant to
the terms of the applicable plans, comparable benefits, provided,
however, that the provision of comparable benefits shall be made
following Employee’s termination of employment only if and to
the extent that such benefits may be provided at no additional cost
above what was previously paid by the Company).
(e)
If Employee terminates this Agreement without cause or Employee is
terminated for cause, then Employee shall be entitled to receive
only the compensation described in Section 4 above earned to
the date of termination. Company shall not pay Employee the salary
and other benefits which Employee would have been entitled to for
the remainder of the term of the Agreement under Sections 4 and
Section 6 above, provided that in the event Employee so
resigns, Employee will receive a bonus for the year in which he
resigned in the ordinary course but prorated based on the number of
days Employee was employed by the Company that year (provided that,
if the bonus is intended to be qualified under section
162(m) of the Internal Revenue Code, payment of the prorated
bonus shall be contingent on satisfaction of the performance target
applicable to the bonus).
(f) This Agreement may be
terminated by Employee at any time, provided such termination shall
have the effect set forth as follows:
(i) Termination of this
Agreement pursuant to this Section 9 shall not relieve
Employee of his obligations to comply with Sections 7 and 8 hereof,
which provisions shall survive the termination of this
Agreement. If, and only if, Employee is terminated without
cause or Employee resigns due to the Company’s material
breach of this Agreement which is not corrected within thirty (30)
days after the Employee’s written notice of the breach to the
Company, then Employee shall be relieved of his obligations under
Sections 7 and 8 hereof.
3.
A new Section 11 is added,
effective as of September 4, 2009:
11.
October 15, 2009 Bonus
Payments.
The Company shall pay Employee a
cash bonus of $4.85 million on October 15, 2009 if Employee is
employed by Company through October 15, 2009. The bonus
shall be promptly repaid if either (a) the merger of Merger
Sub into Company does not occur by November 15, 2009 or
(b) Employee has not remained employed with the Company
through the Effective Time. The requirement of continued
employment in the preceding two sentences shall not apply, however,
if employment has terminated on account of death or
disability.
4.
A new Section 12 is added,
effective as of the Effective Time:
12.
April 1, 2010 and
January 1, 2011 Bonus Payments.
(a)
Subject to the conditions set forth in this Section 12,
Company shall pay Employee a cash bonus of $2.425 million on
April 1, 2010, and a cash bonus of $4.425 million on
January 1, 2011.
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(b)
The bonus payable April 1, 2010 is conditioned on
(1) approval by the PAX Compensation Committee of the issuance
of the bonus as a Performance Unit Award under the Kennedy-Wilson
Holdings, Inc. 2009 Equity Participation Plan (the
“Plan”), (2) approval of the Plan by the
shareholders of PAX (3) Employee’s continued employment
through April 1, 2010, and (4) satisfaction as of
March 31, 2010 of the Performance Target, and
(5) reapproval of the Performance Target by the PAX
Compensation Committee subsequent to the Effective Time. The
“Performance Target” is that the Company’s assets
under management be at least $3 billion. For this purpose,
“assets under management&rdqu
